Managing unfulfillable inventory on Amazon is crucial for maintaining profitability and avoiding unnecessary storage fees. Unfulfillable inventory refers to items that cannot be sold due to damage, defects, or other issues. If left unchecked, this inventory can increase storage costs and harm your bottom line. This guide will walk you through the steps to handle unsellable inventory, helping you recoup some of your investment and keep your business running smoothly.
Can You Sell Unfulfillable Inventory on Amazon?
The short answer is no. Amazon does not allow the sale of unfulfillable inventory, meaning any items in this category cannot be sold through the platform. Instead, these products take up valuable storage space and incur fees. Effective management of this inventory is essential to maintaining a profitable Amazon business.
Why Unfulfillable Inventory is a Problem
Poor inventory management can significantly affect your ability to sell on Amazon, especially during critical sales periods. Unfulfillable items not only result in higher storage fees but also distort stock levels, leading to potential stockouts of profitable items. Additionally, keeping unfulfillable inventory could lead to policy violations, resulting in negative impacts on your account health.
Amazon’s New Removal Deadline for Unfulfillable Inventory
As of September 16, 2024, Amazon has shortened the removal deadline for unfulfillable FBA inventory in European warehouses from 30 days to 23 days. If sellers do not take action within this window, Amazon will automatically dispose of or donate the items. This policy is part of an effort to free up storage space in fulfillment centers. While this change currently applies to European marketplaces, it could be extended to other regions soon. Sellers are advised to act promptly when dealing with unsellable inventory.
What Is Unfulfillable Inventory?
Unfulfillable inventory consists of items that cannot be shipped due to damage, defects, or other issues. Even if the listing remains active, these products are deemed unsellable. Unfulfillable items may be damaged, mislabeled, missing parts, or inaccurately listed. While Amazon conducts inventory cleanup monthly, unfulfillable items continue to incur storage fees, adding to your costs if they are not addressed in time.
Unfulfillable vs. Stranded Inventory
It’s important to differentiate between unfulfillable and stranded inventory. Stranded inventory lacks an active listing, but still incurs storage fees. Unlike unfulfillable inventory, stranded items can be relisted once the issue is resolved, potentially allowing you to recover sales. However, both types of inventory should be managed carefully to avoid excessive storage fees and lost opportunities.
Why You Should Remove Unfulfillable Inventory
Here are several reasons to remove unfulfillable inventory promptly:
- Avoid Storage Fees: Even though they can’t be sold, unfulfillable items still incur monthly storage fees.
- Optimize Stock Levels: Large quantities of unsellable inventory can distort stock levels, making it harder to manage restocking.
- Stay Compliant with Amazon Policies: Failure to remove unfulfillable inventory in time can result in policy violations, which may harm your seller account.
- Lower Opportunity Cost: Storing unfulfillable items means less space for sellable products, reducing potential profits.
- Avoid Customer Complaints: If unfulfillable items are mistakenly relisted, they can end up being returned by customers, further complicating matters.
How to Manage and Remove Unfulfillable Inventory
1. Check for Unfulfillable Inventory
First, identify any unfulfillable items in your inventory. You can check for notifications from Amazon or manually review your stock under the “Unfulfillable Inventory” tab in Seller Central. Note that items damaged by the carrier or warehouse are eligible for refunds, not removal.
2. Choose a Removal Method
Once you’ve identified unfulfillable items, you have several options for removal:
- Return: Request that Amazon returns the items to you, allowing you to inspect or resell them on other platforms.
- Dispose: Let Amazon dispose of the items to free up storage space.
- Liquidate: Recover 5-10% of the item’s value by using Amazon FBA Liquidations.
- Donate: Participate in the FBA Donations program, which allows you to donate unsellable items to charity, potentially earning tax benefits.
3. Set Up Automated Removal
For streamlined management, you can enable automated removal for unfulfillable items. To do this, navigate to the “Fulfillment by Amazon” settings in Seller Central and configure automated removal. You can choose to have items returned, liquidated, or disposed of automatically.
4. Monitor Expiration Dates
Unfulfillable inventory includes items that are close to or past their expiration date. Regularly check the expiration dates of your products, especially perishable goods, to avoid unnecessary removals. Prioritize long shelf-life products to minimize the risk of expiration.
5. Create a Removal Order
To manually remove unfulfillable inventory, go to the FBA Inventory page and use the “Edit” drop-down menu to create a removal order. You can choose to return, liquidate, or dispose of items from this menu. For bulk removals, Amazon provides templates, which can be found in Seller Central.
Is Inventory Removal Free?
Amazon charges a removal fee based on the location and size of the item. In Europe, local returns start at €0.46 per unit, while disposal fees begin at €0.61 per unit. Cross-border and oversized items may incur significantly higher fees, so be sure to consult Amazon’s removal fee schedule.
Key Takeaways
Managing unfulfillable inventory on Amazon is vital for maintaining profitability and account health. By staying proactive, you can minimize storage fees, optimize stock levels, and avoid customer complaints. Whether you opt for manual removal, liquidation, or automation, timely action is essential to keeping your business running smoothly.
Monitoring your unfulfillable inventory regularly and taking swift action to remove unsellable items will help lower costs and increase margins, ensuring that your Amazon business remains profitable. With proper inventory management, you can focus on what truly matters—growing your business and maximizing sales.
